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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: LemonHead who wrote (6643)	1/17/1999 9:55:00 AM
From: RFH	Respond to of 18928

LemonHead, the only seminars I know of are online. Check out Tom Veale's page at: execpc.com What is the ticker symbol of the stock you referred to? All I could tell you is what I would do in your case. Sincerely, RFH

To: LemonHead who wrote (6643)	1/18/1999 7:49:00 AM
From: Bernie Goldberg	Read Replies (2) \| Respond to of 18928

Hi, The most important criteria for an AIM stock is it's cyclical nature. It may be an over simplification but stocks that do nothing but go down are not good candidates for AIM. Neither are stocks that do nothing but go up. However with upwardly mobile stocks with AIM while you won't make as much as you would with buy and hold, you won't go broke. Over the weekend I ran a 3 yr history on BEAM with PCA. BEAM was 30.8 in January 96 when the history started and rapidly dropped from there. It now is bouncing between 4 and 6.( I bought it at 5.06. Using AIM from 1/96 one would have increased the number of shares by about 50% before running out of money. I decided to see what would happen if I increase the amount of cash. I had originally started my simulation with 66% stock and 33% cash. In January 1999 the AIM investor would have lost $7243 while the Buy and Hold investor was down $5526. This was run with a $10,000 initial investment. Changing the cash to $6667 brought the AIM investor's losses to $9989. Just for grins I kept adding more and more dollars to the AIM program. At $60000 one would have had enough cash to ride out the long bottom on this stock and only have a loss of $57. Starting with $6667 in stock and $70,000 in cash in January of 1998 one would have a profit of $2677. I AM IN NO WAY SUGGESTING THAT ONE SHOULD START AN AIM PROGRAM WITH $6667 IN STOCK AND $70000 IN CASH. If a person had been smart enough to not buy BEAM until August of 96 after it had completed the bulk of its precipitous drop he would today have profit of $18 and 1853 shares rather than the 965 he started with. The buy and hold investor would be down about $1800. Mr. Lichello in his book certainly does not recommend throwing more money at a stock that has behaved badly. Being one of the more conservative AIM investors on this thread I concur with Mr. L. in this. The only time I have lost money with AIM was when I bought some share at $24 and AIMed all the way down to $4. I watched it piddle around for a while before I realized that this was a stock that was not going to come back. I sold it at $4 and watched go down to between $ 1 and $2 before it disappeared into the sunset. That experience taught me a lot. It is interesting to see what would happen with the infusion of $65000 to an AIM program with a stock that has been a dud ( but has not disappeared into the sunset). Ain't 20/20 hindsight grand! I was lucky enough to purchase BEAM 12/13/98 at $5. Last week I sold about 6% of my shares and presently have an 8% profit in one month. Annualized that's about 96%. AIM works. If you read the book it will tell you who to set the gauges. You could start with a 10% buy safe and a 10% sell safe and patience. Hope this helps. Bernie

To: LemonHead who wrote (6643)	1/18/1999 11:02:00 AM
From: OldAIMGuy	Respond to of 18928

Hi Keith, A general rule of thumb is that AIM requires the same percentage of Cash Reserve as the drop from a high to a low. In your example, that would mean nearly a 90% Cash Reserve at the top to be able to execute buys all the way to the bottom. This is probably impractical. I guess if you are confident of the company's fundamentals, you can "borrow" cash from other accounts and keep buying. Another is to sense the "fear" in the marketplace (here on SI, just a straw pole of how many posts are negative versus positive will do) and just delay the AIM buy in sort of a TA fashion until you think the worst is over. Of the two methods above, the first will make sure you buy and the second is subject to second guesses and may fail. Another thing one can do is increase the size of the minimum order. This is essentially telling AIM "Don't bother me until something really big is about to happen!" Again, it's a judgement call and is prone to error. There's no easy way to handle such a stock - with or without AIM. Such stocks have low Price Stability ratings and usually very high BETA values as well. There's a reason for these values! We AIMers accept the risks by being prepared as best we can with our business plan. The reason is that we have judged that the long term potential of the company is good enough to offset the short term volatility. In Mr. Phelps' book, 100 TO 1 IN THE STOCK MARKET, he talks about companies that bounce several times before making their eventual goal of 10,000% gains. AIMers can benefit from those bounces while they wait for the major return they seek. Their portfolios build with each bounce, but my own goal is to be picking companies that have excellent long term potential. Best regards, Tom

To: LemonHead who wrote (6643)	1/18/1999 11:05:00 AM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi Keith, We've periodically talked about gathering someplace warm and sandy for an AIM seminar about this time of year!! That's important for us North Coasters. Maybe I should put together a "Dog and Pony Show" that I can take with me and go on the road in my Jag!!! Any interest in such a thing??? Would I have to wear a coat and tie? Don't know if they sell any at "Fleet and Farm" where I shop for clothes!! Best regards, Tom